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THEME 1: Current operation of purchase/sale.
Statement of economic operation.
The firm A sells to the firm B a goods for 1,000 Belgian Francs (out value added tax).
The operation takes place 1st February 1997. The payment takes place by check the15th March 1997.
1st case: for the two firms the goods is a merchandise.
2nd case: for the firm A the goods is a finished product and for the firm B a raw material.
3rd case: for the firm A it concerns a service and for the firm B too.
Work to make:
Pass, in each case, in the book of current operations of the firm A and B.
Belgian solution.
1st case.
Book of the firm A
4000
7040
4511
Sales of goods
5500
4000
Collection of the check
1 / 2/ 97
Customers
1210
Sales of goods for
resale
VAT due
18 / 3 / 97
Current account-bank
Customers
1000
210
1210
1210
Book of firm B
6040
4111
4400
Purchase of goods
4400
5510
5510
5500
Payment of the purchase of 1 / 2/ 97
1 / 2 / 97
Purchase of goods for resale
VAT deductable
Suppliers
15 / 3 / 97
Suppliers
Issued cheques
18/3/97
Issued cheques
Current account-bank
1000
210
1210
1210
1210
1210
1210
2
2nd case
Book of firm A
.
4000
7040
4511
Sales
of
finished
products
.
5500
4000
Collection of the check
1 / 2/ 97
Customers
Sales of goods for resale
VAT due
18 / 3 / 97
Currrent account-bank
Customers
1210
1000
210
1210
1210
Book of the firm B
.
6000
4111
4400
Purchase of raw materials
.
4400
5510
5510
5500
Payment of the purchase of 1 / 2 / 97
1 / 2 / 97
Purchase of raw materials
VAT deductable
Suppliers
15 / 3 / 97
Suppliers
Issued cheque
18/3/97
Issued cheque
Current account-bank
1000
210
1210
1210
1210
1210
1210
3
3rd case
Book of the firm A
.
4000
7050
4511
Sales of services
.
5500
4000
Collection of the check
1 / 2 / 97
Customers
Services rendered
VAT due
18 / 3 / 97
Current account-bank
Costumers
1210
1000
210
1210
1210
Book of the firm B
.
6100
4111
4400
Purchase of services
.
440
5510
5510
5500
Payment of the purchase of 1 / 1 / 97
1 / 2 / 97
Services and other goods
VAT deductable
Suppliers
15 / 3 / 97
Suppliers
Issued cheque
18 /3 / 97
Issued cheque
Current account-bank
1000
210
1210
1210
1210
1210
1210
Commentary :
In Belgian accountancy, it is a necessary to distinguish operations:
 purchase/sale of goods, case n 1,
 purchase of raw materials and sale of finished products, case n 2,
 purchase/sale of services, case n 3.
Remarks:
1) to a sale of merchandise can correspond a purchase of raw material; and to a sale of finished product a
purchase of merchandise.
The normal VAT rate in Belgium is since 1/1/1996 21 %.
2) When a service is a part of a purchase (f.e. transport of purchased goods) we use the 6020 ‘Services and other
goods’ in stead of the more general account 6100 ‘Services and other goods’.
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TECHNICAL FORM OF THEME N 1: CURRENT OPERATION OF
PURCHASE/SALE.
Definition of loads.
Loads include sums or poured values or to pour :
 in counterpart of goods, supplies, works or services consumed by the firm, as well as of advantages that it
have been consented
 by legal obligation that the firm has to fill ;
 exceptionally, without conterpart.
They include also, for the determination of the exercice result :
 endowments to depreciations,
 the accounting value of assets yielded, destroyed or disappeared.
Current purchases.
Evaluation.
Purchases are registered to the debit of accounts 601 to 607 at the price of the purchase.
The purchase price means the invoiced price, net of recoverable taxes, to which add notably customs duties to
goods acquired.
Purchases are put in account, suitable rebate deduced of the amount of invoices (from the initial invoice).
Definition of products.
Products understand sums or values receive or to receive :
 in counterpart of the supply by the firm of goods, works, services as well as of advantages it has given ;
 by legal obligation existing to the cost of a third firm ;
 exceptionally without counterpart.
They understand equally, for the determination of the exercice result :
 the stocked production during the exercice ;
 the production immobilized ;
 resumption on depreciations ;
 the price of transfer of assets yielded ;
 transfers of load.
Current products.
Turn over.
The accounting plan defines the turnover as the amount of sells realized by the firm with thirds during the
exercice of its normal professional and usual activity either, according to the profit and loss statement, the
amount out taxes of sales and the production less ‘discounts, allowances and rebeates allowed’ granted by the
firm (account 708).
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Extract from the ‘MINIMUM STANDARD CHART OF ACCOUNTS’ compulsory for every company
Class 4: Amounts receivable and payable within 1 year:
4000 Customers
4111 VAT recoverable
4400 Suppliers
4511 VAT payable
Additional explanation
These are VAT-balance-accounts. For the regular VAT-transactions most companies use other sub-accounts.
For instance: 4111 VAT deductible and 4511 VAT due.
Class 5: Current investment and cash at bank and in hand
5500 Current account-bank
5510 Cheques issued
Class 6: Charges
6000 Purchase of raw materials
6010 Purchase of consumables
6020 Purchases of services, works and studies
6030 General sub-contracting
6040 Purchase of goods for resale
6I00 Services and other goods
Class 7: Income
70 Turnover
700-707 Sales and services rendered
708 Discounts, allowances and rebates allowed (-)
Remark
All digit codes may be extended according to specific wishes . Most companies choose for a fixed number of
digit codes for all their accounts.